Markets trade slightly in green in early deals

Indian equity markets, after making a negative start, have turned into green and are now trading near neutral line with marginal gains in early deals on the back of fresh buying by funds and retail investors in early deals. Traders took some encouragement with Employees’ Provident Fund Organisation’s (EPFO) payroll data showing that as many as 41.26 lakh new jobs were created in the eight months till April this year, with largest ever addition of 6.85 lakh in April alone. However, gains remain capped with the Reserve Bank of India’s (RBI) report that Indian companies’ investments into their overseas subsidiaries/joint ventures fell by 63% to $1.17 billion in May this year. Depreciation in Indian rupee against dollar too weighed on the sentiments. The Indian rupee weakened against the US dollar on Tuesday, amid global policy uncertainties and sell-off in global equity markets. The rupee was trading at 68.20 a dollar, down 0.10% from its Monday’s close of 68.13.

On the global front , U.S. stocks end sharply lower, with major indexes seeing their biggest one-day drop in weeks and the Dow bearishly closing below a closely watched level for the first time in two years as fresh threats from President Donald Trump against U.S. trading partners underlined how the risk of protectionist policies has not left the market. Asian Markets are trading mostly in red as investors continued to worry about an escalating exchange of trade and investment restrictions, triggered by the Trump administration.

Back home, traders were seen piling up position in Capital Goods, FMCG, IT, TECK and Oil & Gas, while selling was witnessed in Power, Utilities, Metal, Healthcare and Consumer Durables. In the scrip specific development, Avanti Feeds rallied 19% to Rs 619 per share on the BSE. The stock of shrimp exporter has turned ex-stock split in the ratio of 1:1 and ex-bonus in the ratio of 1:2 from today. The market breadth on the BSE was negative; there were 834 shares on the gaining side against 904 shares on the losing side, while 77 shares remain unchanged.

The BSE Sensex is currently trading at 35481.01, up by 10.66 points or 0.03% after trading in a range of 35338.09 and 35481.58. There were 16 stocks advancing against 14 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.08%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.52%, FMCG up by 0.39%, IT up by 0.38%, TECK up by 0.30% and Oil & Gas up by 0.24%, while Power down by 0.40%, Utilities down by 0.39%, Metal down by 0.36%, Healthcare down by 0.34% and Consumer Durables down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.49%, Asian Paints up by 1.19%, Mahindra & Mahindra up by 0.99%, ONGC up by 0.89% and Hindustan Unilever up by 0.60%. On the flip side, Vedanta down by 1.80%, Tata Motors down by 1.33%, Hero MotoCorp down by 1.18%, ICICI Bank down by 1.02% and Power Grid down by 0.90% were the top losers.

Meanwhile, continuing their declining trend, the share of foreign portfolio investments (FPIs) in domestic capital markets through participatory notes (P-notes) has slipped over 9-year low of more than Rs 93,000 crore at the end of May, amid stringent norms put in place by Securities and Exchange Board of India (SEBI) to check the misuse of these instruments. This is the lowest level since April 2009 when the cumulative value of such investments stood at Rs 72,314 crore. According to SEBI data, total value of P-Notes investments in Indian markets including equity, debt and derivatives, at May end dropped to Rs 93,497 crore from Rs 1,00,245 crore at the end of April. Prior to that, the figure was Rs 1,06,403 crore.

Of the total, P-note holdings in equities at May-end were at Rs 70,442  crore, while in debts and derivatives were at Rs 19,532 crore and Rs 3,523 crore respectively. The quantum of FPI investments via P-notes declined to 2.9 percent during the period under review from 3 percent in the preceding month. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock markets without registering themselves directly. They, however, need to go through a proper due diligence process.

The fall in P-notes could be attributed to several measures taken by the market regulator to stop the misuse of the controversy-ridden participatory notes. In July 2017, SEBI had notified stricter norms stipulating a fee of $1,000 on each instrument to check any misuse for channelising black money. It had also prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those which are used for hedging purposes. These measures were an outcome of a slew of other steps taken by the regulator in the recent past. In April last year, SEBI had barred resident Indians, NRIs and entities owned by them from making investment through P-notes.

The CNX Nifty is currently trading at 10767.85, up by 5.40 points or 0.05% after trading in a range of 10732.55 and 10769.55. There were 29 stocks advancing against 20 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Ultratech Cement up by 2.08%, Coal India up by 1.76%, Asian Paints up by 1.16%, HPCL up by 0.99% and Bajaj Finance up by 0.90%.

On the flip side, Vedanta down by 1.71%, Tata Motors down by 1.50%, Bharti Infratel down by 1.18%, Hero MotoCorp down by 1.12% and UPL down by 1.09% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 38.02 points or 0.17% to 22,300.13, Straits Times shed 4.80 points or 0.15% to 3,256.04, Hang Seng dropped 62.75 points or 0.22% to 28,898.64, Taiwan Weighted slipped 81.75 points or 0.76% to 10,704.71, KOSPI decreased 11.29 points or 0.48% to 2,346.59, and Shanghai Composite was down by 23.46 points or 0.83% to 2,835.88.

On the flip side, Jakarta Composite was up by 12.78 points or 0.22% to 5,871.86.